TREASURY

Office for Budget Responsibility (Pre-Budget Forecast)

George Osborne: The interim Office for Budget Responsibility has published its pre-Budget forecasts for the economy and the public finances.
	Copies of the publication are available in the Vote Office and have been deposited in the Libraries of both Houses.

DEFENCE

Operational Allowance

Liam Fox: My right hon. Friend the Prime Minister has announced recently during his visit to Afghanistan the doubling of the operational allowance which we pay to our armed forces engaged in the most demanding areas of conflict. In doing so, we are fulfilling a key commitment to our armed forces in our Programme for Government.
	The tax-free operational allowance will increase from £14.51 per day to £29.02 with effect from 6 May 2010. This will mean a typical six-month tour payment increasing from £2,640 to £5,281. Payment is in the form of a single lump sum paid on completion of operational service.

FOREIGN AND COMMONWEALTH AFFAIRS

Nuclear Non-Proliferation Treaty (NPT) Review Conference

William Hague: The House may welcome a report on the outcome of the review conference of the nuclear non-proliferation treaty (NPT) held in New York from 3 to 28 May and Government action and policy in this regard.
	It is the view of the Government that we are facing the risk of a new age of nuclear insecurity. In recent years, the NPT has come under unprecedented pressure from a combination of factors: the nuclear ambitions of Iran and North Korea; the risks of terrorist groups acquiring nuclear materials; the expected global renaissance in civil nuclear energy potentially leading to the dissemination of sensitive technology; and a fraying of the international consensus that has underpinned the treaty due to a perception that the nuclear weapon states have not done enough to meet their nuclear disarmament commitments under the NPT.
	But all states benefit substantially from the NPT, in terms of both enhanced security and co-operation on civil nuclear energy. It is too important to be allowed to be undermined.
	As I said in the Foreign Affairs debate on 26 May 2010, Official Report, column 181:
	"stemming an uncontrolled spread of nuclear know-how and equipment, deterring any country that might be tempted to try to acquire nuclear weapons from doing so and keeping nuclear material out of the hands of terrorists must be a top foreign policy priority of any British Government.... In opposition, my party promised decisive UK leadership in this effort if elected, and the coalition agreement pledged an immediate and strong UK role at the conference.'
	I am delighted therefore that the conference successfully reached agreement to revitalise the treaty as the cornerstone of global efforts to prevent the spread of nuclear weapons, to promote the safe and secure use of civil nuclear energy and to pursue the goal of a world without nuclear weapons.
	I warmly congratulate the president of the conference, Ambassador Cabactulan of the Philippines, and all the states parties to the NPT for successfully putting aside the failures of the past to make this review conference a success.
	The UK pushed hard for this success. During the Foreign Affairs debate in this House on 26 May, as an immediate contribution further to assist in building the climate of trust between nuclear and non-nuclear weapons states, I announced the ceiling figure for the UK's overall nuclear warhead stockpile (225) and that the Government will re-examine the UK's nuclear declaratory policy as part of the strategic defence and security review. The Under-Secretary of State for Foreign and Commonwealth Affairs, the hon. Member for North East Bedfordshire (Alistair Burt) attended the review conference on the same day to repeat these announcements there as well as to meet other delegations to help promote a positive outcome.
	The negotiations were not easy and the outcome necessarily represents compromise between the states parties. But it also marks, after the failure to secure agreement at the previous review conference in 2005, the first time in 10 years that the international community has been able to come together to agree on the collective efforts that will be required. President Obama's leadership, with the conclusion of the New START agreement, the US nuclear posture review and the Washington nuclear security summit in April provided critical political impetus.
	The UK's Objectives
	We wanted the conference to agree on a balanced outcome with specific forward action plans to strengthen implementation of the treaty's non-proliferation and disarmament provisions and to support civil nuclear energy without increasing proliferation risks. We also wanted the conference to decide how to implement the resolution, adopted at the 1995 review and extension conference, on a zone free of weapons of mass destruction in the middle east, particularly as agreement on this was critical to achieving consensus on the other elements.
	Achieving consensus among 189 states parties on such a substantive agenda was deliberately ambitious and we recognised that it would be challenging. The conference none the less succeeded in reaching agreement, for the first time in the NPT's history, on a detailed and balanced set of actions to revitalise the treaty, establishing benchmarks for future progress.
	That sends a strong signal both of united commitment among the overwhelming majority of states which abide by their responsibilities under the treaty, and of warning to Iran, North Korea and any other state or terrorist group which might be tempted to try to acquire nuclear weapons. It affirms that the world is ready to stand united against this threat and to rebuild the trust and partnership necessary as well as ensuring access to the peaceful applications of nuclear technology to all those countries desiring it in accordance with the NPT. It is proof that multilateral diplomacy can bear fruit, even in this sensitive area.
	Non-Proliferation
	We need to strengthen the regime of checks and controls to ensure that nuclear technology can be shared while reducing to a minimum the risk that technology and material could be used to provide a weapons capability to countries that do not now possess one.
	It is highly encouraging that, for the first time in an NPT document, the conference recognised that comprehensive safeguards agreements and the additional protocol are essential for the IAEA to carry out its international safeguards responsibilities and that they represent the enhanced standard for verification of the NPT. All parties are encouraged to conclude and bring into force additional protocols.
	The conference underscored the importance of the IAEA exercising fully its mandate and authority to verify states' nuclear activities and supported strengthening the IAEA and assuring that it has sufficient resources. It called for strengthened export controls and urged states parties to improve their standards to combat illicit trafficking in nuclear materials and become parties to the international convention for the suppression of acts of nuclear terrorism.
	But enhancing the IAEA's ability to detect safeguard violations is not enough. Potential violators must know that if they are caught, they will pay a high price. Given that the conference worked by consensus, it was regrettably not possible for the actions of Iran-the only country at the conference which had been found by the IAEA board of governors to be currently in non-compliance with its nuclear safeguards obligations-to be directly criticised in the concluding documents. The conference none the less emphasised the importance of addressing questions over compliance with the treaty and the role of the UN Security Council to take appropriate measures in cases of violations reported to it.
	On 9 June, the UN Security Council imposed further sanctions on Iran for its ongoing violations of previous resolutions and its failure to co-operate with the IAEA over its nuclear programme. We will be working with our partners to introduce further EU measures against Iran in the coming months.
	The situation in North Korea, which did not attend the conference as it claims to have withdrawn from the treaty, was identified as constituting a threat to the peace and security of north-east Asia and the entire international community, and posing a critical challenge to the global non-proliferation regime. North Korea was urged to fulfil its commitments under all relevant non-proliferation and disarmament obligations.
	For the first time in any NPT final document, the conference recognised that withdrawing parties are responsible for violations committed prior to withdrawal, and that consultations and actions by nuclear suppliers are needed to discourage abuse of the treaty's withdrawal provision.
	The non-parties to the treaty, India, Israel and Pakistan, were urged to accede to it as non-nuclear-weapon states and to place all their nuclear facilities promptly under comprehensive agency safeguards without conditions.
	Nuclear Disarmament
	The long-term vision of a world without nuclear weapons was reflected in an action plan which demonstrates to the international community that the five nuclear weapon states are taking their disarmament obligations seriously, and which sets out measures which will help us all-nuclear and non-nuclear weapon states alike-to make real progress in the coming years. The conference recognised the achievement of the US-Russia New START agreement, and steps taken by other nuclear weapon states, and reflected the shared interest in achieving deeper reductions of all types of nuclear weapons and reducing their role.
	My announcements on 26 May demonstrated the UK's resolve to make further nuclear disarmament steps possible: by building trust, by setting high standards for others to follow, and by ensuring that our nuclear declaratory policy is fully appropriate to the political and security circumstances of 2010 and beyond. We circulated papers at the conference detailing the UK's strong disarmament record and on our joint research with Norway into the complex science of verifying warhead dismantlement, demonstrating the substantial action that we are taking.
	The nuclear weapons states agreed to consider collectively further steps on transparency, negative security assurances and nuclear weapons-free zones. The conference encouraged the early entry into force of the comprehensive nuclear test ban treaty and the start of negotiations, without further delay, of a fissile material cut-off treaty.
	Civil Nuclear Energy and Nuclear Security
	Oil prices and climate change will make nuclear energy attractive to many, just as growing populations and economies in the developing world will make it increasingly necessary. There is already increased demand for the construction of new nuclear facilities worldwide.
	Proliferation control needs to keep pace with this fast-changing reality. Nuclear energy will only fulfil its full potential if it is developed within a culture of openness, transparency and confidence. In this regard, the conference recognised the importance of continuing discussions to secure the introduction of multilateral approaches to the nuclear fuel cycle. It also called for greater efforts to enhance the effectiveness and efficiency of the IAEA's technical co-operation programme, which contributes to development in some of the poorest regions of the world.
	The conference acknowledged the successful Washington nuclear security summit in April, in which the UK played a leading role, and encouraged carrying forward its recommendations, including recognition of the IAEA's role in promoting nuclear security co-operation and best practices, and the need to minimise the use of highly enriched uranium in the civilian sector.
	The Middle East
	The outcome on the middle east represented a major step forward, with agreement to hold a regional conference in 2012 to discuss issues relevant to a middle east zone free of weapons of mass destruction and their delivery systems. Responsibility for the regional conference is shared between the UN Secretary-General and the NPT depositary states (Russia, the UK and the US).
	The UK has long supported such a zone as an achievable goal-we co-sponsored the resolution on the middle east at the 1995 review conference-while recognising that its realisation lies in progress towards a comprehensive peace in the middle east and in ensuring that other states in the region, including Iran and Syria, are fully implementing and upholding the existing international agreements.
	The agreement on the middle east involved difficult compromise from all parties involved. The singling out of Israel in the final document, and without any reference to Iran, will make progress more difficult: Israel was not a formal party to the discussion and has already made clear its difficulty with the decision. Building confidence among all the parties in the region and giving them full ownership of the conference will be essential for success. The UK will play a full and active role.
	Conclusion
	This review conference was an important milestone in our long-term vision for a world without nuclear weapons. Now we have a map to help us move forward. We will now work, with our international partners, to capitalise on these achievements and to translate these commitments into concrete action in the years ahead.

TRANSPORT

Rail Value For Money Study

Philip Hammond: I welcome the publication of the scoping study report from Sir Roy McNulty's review of value for money on the railway. While I recognise that this report represents a very early stage in the work of Sir Roy and his team, I believe that the report represents an important step in identifying the factors that drive up the cost of the UK railway.
	Given the scale of the fiscal deficit the UK is facing, it is vital that public spending be subject to scrutiny to ensure that it represents value for money. We must adjust to a world in which our aspirations for a successful railway have to be met from within a much tighter public spending envelope. As the scoping study highlights, there is evidence that the cost of the UK railway is relatively high, both in historic terms, and by comparison with other European railways.
	The next stage will be to look at options for ensuring public investment in the railways is delivered as efficiently and effectively as possible. I have therefore asked Sir Roy to accelerate key elements of his work so that his preliminary findings can inform the decisions on public spending that will have to be taken in the autumn.
	I would call upon all stakeholders in the rail industry to offer Sir Roy and his team their fullest co-operation. By driving efficiencies on the railway, we can ensure that passengers and freight users get the railway they need at a price which Government and taxpayers can afford.
	Copies of the report have been placed in the Libraries of both Houses and are available on the Department's website (www.dft.gov.uk).